There is a straightforward approach to trading cryptocurrencies that, while slow, can yield consistent profits over time. The key is to avoid making these three critical mistakes:
1. Never buy during an uptrend.
• Be greedy when others are fearful and fearful when others are greedy.
• Train yourself to buy during dips — make it a habit. Opportunities lie in fear, not FOMO.
2. Never pursue trades with heavy stakes.
• Pressing your luck or forcing negotiations will backfire. Stick to your plan.
3. Never go all-in.
• All-in trading is a trap. The markets are full of opportunities, and being fully committed prevents you from taking better chances. Manage your risk and stay flexible.
Six Key Principles for Short-Term Trading
1. High-level consolidation usually leads to a new high.
Similarly, low-level consolidation often leads to a new low. Wait for clarity on direction before making moves.
2. Avoid trading during sideways markets.
Most traders lose money because they can't resist trading during flat markets. Learn to stay put when the market isn't moving.
3. Trade with the trend: buy on red candles, sell on green candles.
• When the daily chart closes in red, buy.
• When it closes in green, sell.
4. If a downtrend slows down, the recovery will also be slow.
• Accelerated declines lead to faster recoveries — watch the pace of price movements.
5. Use the pyramid method to build positions.
• This is the fundamental principle of value investing. Scale slowly, increasing positions over time as conviction builds.
6. Don't rush to sell on highs or buy on lows.
• After sharp rises or falls, markets often enter a consolidation phase. Avoid buying or selling all-in during these periods. If the price breaks out of a consolidation, exit immediately. The key is to stay nimble and move with the trend.
Stick to these principles and you’ll be one step ahead of most traders. Patience and discipline are your greatest weapons in the market.
